Question

Selected Dividend Transactions, Stock Split Selected transactions completed by Canyon Ferry Boating Corporation during the current fiscal year are as follows: Journalize the transactions. If no entry is required, type "No Entry Required" and leave the amount boxes blank. For a compound transaction, if an amount box does not require an entry, leave it blank. Jan. 8. Split the common stock 2 for 1 and reduced the par from $48 to $24 per share. After the split, there were 126,000 common shares outstanding. Jan. 8 No Entry Required No Entry Required Feedback Review the effect of stock splits on equity accounts. Apr. 30. Declared semiannual dividends of $1.6 on 9,000 shares of preferred stock and $0.13 on the common stock payable on July 1. Apr. 30 Common Stock 30,780 Cash Dividends Payable 30,780 Feedback When a company declares a dividend it becomes legally binding. July 1. Paid the cash dividends. July 1 Cash Dividends Payable 30,780 Cash 30,780 Feedback Correct Oct. 31. Declared semiannual dividends of $1.6 on the preferred stock and $0.11 on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $43. Cash Dividends Cash Dividends 15,200 Cash Dividends Payable 15,200 Stock dividends Stock Dividends 30,960 Stock Dividends Distributable 17,280 Paid-In Capital in Excess of Par-Common Stock 13,680 Feedback On the date of declaration of a cash dividend, it becomes legally binding. How do stock dividends affect stockholders' equity? Dec. 31. Paid the cash dividends and issued the certificates for the common stock dividend. Payment Cash Dividends Payable 15,200 Cash 15,200 Issuance Stock Dividends Distributable 17,280 Common Stock

Answer 1

8-Jan	NO Enry required as the value against o/s shares will not change(63000* $ 48)=(126000* $ 24)--
	A disclosure memo can be created , that now, no.of shares o/s is 126000 (63000*2)
Apr.30	Retained Earnings	30780
	Preferred dividends payable(1.6*9000)		14400
	Common stock dividend payable(0.13*126000)		16380
	When a company declares a dividend it becomes legally binding
1-Jul	Preferred dividends payable(1.6*9000)	14400
	Common stock dividend payable(0.13*126000)	16380
	Cash		30780
Oct.31	Retained Earnings	28260
	Preferred dividends payable(1.6*9000)		14400
	Common stock dividend payable(0.11*126000)		13860
	Common stock dividend of 126000*2%= 2520 common stock shares
	Retained Earnings(2520*43)	108360
	Common stock dividend distributable		108360
31-Dec	Preferred dividends payable(1.6*9000)	14400
	Common stock dividend payable(0.11*126000)	13860
	Cash		28260
	Common stock dividend distributable	108360
	Common stock(2520*24)		60480
	APIC-Common stock(2520*(43-24))		47880
Stock dividend ,on the payment date when share certificates are issued, is converted to share capital at par & the amt.in excess of par value,is credited & retained as additional paid in capital-in excess of par. So, total shareholders' equity increases by the total amount(Par+ excess)